How do the new fields on the the Free or Cheap Accommodation Fringe Benefit (New) component work?
This feature is available on all PaySpace editions.
Providing an employee with residential accommodation, whether at no cost or for a lower amount than its determined rental value, results in a taxable fringe benefit. This accommodation can be furnished or unfurnished and may include or exclude fuel, electricity, or water
When the Accommodation Fringe Benefit is added to an employees Recurring Payroll Components screen the user needs to select one of the 3 available options.
Navigate > Employee > Payroll Processing > Recurring Payroll Components > Fringe Benefits
The options available for selection are:
- Does the employee have an interest in the accommodation?
- Should the abatement be reduced to zero as per section 9.(3)(ii)(aa) and (bb)?
- Is the accommodation obtained by the employer or associated institution at an arm’s length transaction with an unconnected person; and the full ownership does not vest in the employer or associated institution?
When the selection is made the formula will be applied and adjusted as per the below.If the option 1 "Does the employee have an interest in the accommodation?" is selected, the accommodation formula will be applied.
If option 2 "Should the abatement be reduced to zero as per section 9.(3)(ii)(aa) and (bb)?" is selected, the Abatement will be reduced to zero in the formula.
If option 3 "Is the accommodation obtained by the employer or associated institution at an arm’s length transaction with an unconnected person; and the full ownership does not vest in the employer or associated institution?" is selected on the component, the system will take the lower of the formula value or the expenditure paid by employer captured on the screen.
If option 1 and 2 is selected, the formula will be used but the abatement will be reduced to zero.
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